IDEAS home Printed from https://ideas.repec.org/a/mth/raee88/v6y2014i4p95-105.html
   My bibliography  Save this article

Assessing the Validity of Zero Conjectural Variation Hypotheses in Competition in Nigerian Sugar Industry

Author

Listed:
  • C. Chris Ofonyelu

    (Department of Economics, Adekunle Ajasin University, Akungba Akoko, Ondo State, Nigeria)

Abstract

The crux of Cournot and Bertrand theory of industrial relationship is based on zero conjectural variation in output and Prices. The two theories assume that firms form constant expectations about their rival¡¯s reaction during output and price competition. This study examined the validity of zero conjectural variation hypotheses within the context of the competition in Nigerian sugar industry. Using a two-stage least square analogy and data of wholesale sugar prices between January 2007 and June 2014, the study examined the interrelationships in the firms¡¯ price and output competition. Evidence from the study showed positive conjectural variation among the sugar firms, suggesting that output and price of rival firms varied with competition. The strong interdependency among the sugar firms suggests a continued long run competition and stable price in the industry.

Suggested Citation

  • C. Chris Ofonyelu, 2014. "Assessing the Validity of Zero Conjectural Variation Hypotheses in Competition in Nigerian Sugar Industry," Research in Applied Economics, Macrothink Institute, vol. 6(4), pages 95-105, December.
    • Handle: RePEc:mth:raee88:v:6:y:2014:i:4:p:95-105
    as

    Download full text from publisher

    File URL: http://www.macrothink.org/journal/index.php/rae/article/view/6820/5623
    Download Restriction: no
    File URL: http://www.macrothink.org/journal/index.php/rae/article/view/6820
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Davidson, Carl & Deneckere, Raymond J, 1990. "Excess Capacity and Collusion," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 521-541, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Symeonidis, George, 2001. "Price Competition, Innovation and Profitability: Theory and UK Evidence," CEPR Discussion Papers 2816, C.E.P.R. Discussion Papers.
    2. Felix Höffler, 2009. "Mobile termination and collusion, revisited," Journal of Regulatory Economics, Springer, vol. 35(3), pages 246-274, June.
    3. Steen, Frode & Sorgard, Lars, 1999. "Semicollusion in the Norwegian cement market," European Economic Review, Elsevier, vol. 43(9), pages 1775-1796, October.
    4. Knittel, Christopher R. & Lepore, Jason J., 2010. "Tacit collusion in the presence of cyclical demand and endogenous capacity levels," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 131-144, March.
    5. Lahkar, Ratul & Pingali, Viswanath, 2016. "Expansion and welfare in microfinance: A screening model," Economic Modelling, Elsevier, vol. 53(C), pages 1-7.
    6. Marcel Canoy & Patrick Rey & Eric van Damme, 2004. "Dominance and Monopolization," Chapters, in: Manfred Neumann & Jürgen Weigand (ed.), The International Handbook of Competition, chapter 7, Edward Elgar Publishing.
    7. Jeanine Miklós-Thal, 2011. "Optimal collusion under cost asymmetry," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(1), pages 99-125, January.
    8. Andrei Y. Shastitko & Svetlana V. Golovanova, 2014. "Collusion in markets characterized by one large buyer: lessons learned from an antitrust case in Russia," HSE Working papers WP BRP 49/EC/2014, National Research University Higher School of Economics.
    9. Emmanuel Dechenaux & Dan Kovenock, 2011. "Endogenous rationing, price dispersion and collusion in capacity constrained supergames," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 47(1), pages 29-74, May.
    10. Raymond J. Deneckere & Dan Kovenock, 1992. "Price Leadership," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 143-162.
      • Raymond Deneckere & Dan Kovenock, 1988. "Price Leadership," Discussion Papers 773, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    11. Spagnolo, Giancarlo, 2005. "Managerial incentives and collusive behavior," European Economic Review, Elsevier, vol. 49(6), pages 1501-1523, August.
    12. Zenger, Hans, 2013. "Competition and collusion with fixed output," Economics Letters, Elsevier, vol. 120(2), pages 259-261.
    13. Lars-Hendrik Röller & Frode Steen, 2006. "On the Workings of a Cartel: Evidence from the Norwegian Cement Industry," American Economic Review, American Economic Association, vol. 96(1), pages 321-338, March.
    14. de Roos, Nicolas, 2006. "Examining models of collusion: The market for lysine," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1083-1107, November.
    15. Vettas, Nikolaos & Biglaiser, Gary, 2004. "Dynamic Price Competition with Capacity Constraints and Strategic Buyers," CEPR Discussion Papers 4315, C.E.P.R. Discussion Papers.
    16. Yongyang Cai & Yongyang Cai & Kenneth L. Judd, 2017. "Computing Equilibria of Dynamic Games," Operations Research, INFORMS, vol. 65(2), pages 337-356, April.
    17. Wang, Yadong & Wang, Delu & Shi, Xunpeng, 2021. "Exploring the dilemma of overcapacity governance in China's coal industry: A tripartite evolutionary game model," Resources Policy, Elsevier, vol. 71(C).
    18. Stephen Davies & Peter Ormosi & Martin Graffenberger, 2015. "Mergers after cartels: How markets react to cartel breakdown," Journal of Law and Economics, University of Chicago Press, vol. 58(3).
    19. Felix Hoeffler, 2006. "Mobile termination and collusion, revisited," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2006_16, Max Planck Institute for Research on Collective Goods.
    20. Matthias Hunold & Kai Hüschelrath & Ulrich Laitenberger & Johannes Muthers, 2020. "Competition, Collusion, and Spatial Sales Patterns: Theory and Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 68(4), pages 737-779, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mth:raee88:v:6:y:2014:i:4:p:95-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Technical Support Office The email address of this maintainer does not seem to be valid anymore. Please ask Technical Support Office to update the entry or send us the correct address (email available below). General contact details of provider: http://www.macrothink.org/journal/index.php/rae .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.